Posts Tagged ‘United States’

Articles

Revisiting IRS Budget Cut…

In Accounting & Finances,Business,Taxes on March 18, 2012 by Sufen Wang Tagged: , , , , , , ,

IRS Practitioner Phone Line Wait Time: First Sign of Services Decline?
 
Back in November, the IRS predicted that reducing its budget would mean trouble for taxpayers and practitioners down the road. Well, now we’re down the road and it looks like the IRS was right. (Ref: Blog: IRS Budget Cut)
 
From January 1 to March 1, IRS’s practitioner priority telephone line serviced only 69.9 percent of calls and the average wait time was 26 minutes. IRS Taxpayer Advocate Nina Olson advised callers to “bring your knitting to the phone.” She explained that “There is simply too much work and not enough employees to do the work.” Many practitioners have already noticed an overall increase in tax return processing time and the issuance of tax refunds
 
If problems like this are occurring with only a 0.2% reduction in funding from 2010 to 2011, then just imagine how long the wait time will be when the 2.5% cut in 2012 comes into full effect. On the bright side, at least a lot of sweaters will get knitted.
 
On the Money,
Sufen Wang
Wang Solutions

Articles

The Return of the Dirty Dozen…

In Accounting & Finances,Business,Taxes on March 2, 2012 by Sufen Wang Tagged: , , , , , , ,

Another Dirty Dozen: The Top 12 Tax Scams of 2012
 
As long as there are taxes, there are going to be scams. A lot of money gets moved around in April and a lot of people want to get their hands on it – illegally. If you’re one of those people, you’ll probably be in jail sometime soon. Luckily, the IRS’ “Dirty Dozen” – the list ranking scams taxpayers are most likely to get sucked into – is back. Let’s see how things have changed since we brought you the “Dirty Dozen” last year.
 
The new leader of the IRS’ “Dirty Dozen” is Identity Theft. This is a growing problem in which somebody uses a real taxpayer’s personal information to file a return and then receives the refund. If that sounds like a good idea to you, just know that the IRS is cracking down on this particular scam with law-enforcement. There’s even a special web page to help taxpayers spot when somebody is pretending to be them. So how do you know if your name is being used elsewhere? If you get an IRS notice telling you that you filed more than one return, you could be a victim of identity theft.
 
Close behind is Phishing. This does not have to do with going out on a boat and catching things in the water. This is actually when a scammer uses a fake website or email to steal your personal information – which they can then use for the big bad identity theft. Always check that you’re on the real IRS site (the address should contain irs.gov) and since the IRS doesn’t send out any e-mails, don’t open anything that is supposedly from the agency or the Electronic Federal Tax Payment System (EFTPS). Oh, and don’t post your social security number on the “IRS” Facebook page.
 
Remember that post a few weeks ago about finding the right preparer? It was supposed to help you avoid becoming a victim of scam number three, Return Preparer Fraud. These corrupt preparers will do anything, from stealing part of your return, to charging you outrageous fees. Make sure your preparer includes his/her signature and PTIN on your return, and walk away if they tell you to include false information.
 
You really can’t get away from Hiding Income Offshore. The number one scam on last year’s “Dirty Dozen” list, evading taxes by storing your assets out of the United States, continues to be a huge problem. That’s not to say that you can’t keep stuff overseas – you just have to tell the IRS about it. If you’ve had a change of heart and want to stop being a scammer, the Offshore Voluntary Disclosure Program is still going on.
 
The above are the most prevalent issues, but there’s still a lot of scamming going on at the bottom of the list. Don’t pay attention to people offering advice – for a fee – about how to get Free Money” from the IRS & Tax Scams Involving Social Security. You’ll be paying money for a claim that is eventually going to get rejected by the IRS. And don’t think you can get away with penning in False/Inflated Income and Expenses on your tax return. Although it might seem easy to claim income or expenses you didn’t really pay, so that you can receive refunds like the EITC, you’ll face interest and penalties when you do get caught.
 
The same goes for False Form 1099 Refund Claims. Filing a fake information return to verify a fake refund claim will result in real problems for you. And don’t listen to Frivolous Arguments about why you don’t need to pay taxes. Pay first, and then if you have a problem, bring it up in court later. You also need to pay the correct amount that you owe, so don’t Falsely Claim Zero Wages. 
 
Perhaps the dirtiest scam on the Dirty Dozen is Abuse of Charitable Organizations and Deductions. Yes, people will do things like “improperly shield income or assets from taxation” and “maintain control over donated assets.” Charities are for you to help other people – not yourself. The penultimate scam, Disguised Corporate Ownership, is when the true ownership of a business is obscured. Last but not least is Misuse of Trusts. Promoters will convince taxpayers to transfer their assets into trusts, promising less income subject to taxation or reduced estate taxes. In reality, this is just a fancy way of avoiding tax liability.
 
The IRS is watching you.
 
 
On the Money,
Sufen Wang
Wang Solutions
 

Articles

Not making the Grade in Your Business?

In Accounting & Finances,Business,Education,Taxes on November 21, 2011 by Sufen Wang Tagged: , , , , , , ,

Get Schooled by the IRS for Free
 
Wall Street isn’t the only place that’s been occupied lately. Proposed tuition increases have caused students on college campuses across the U.S. to stand up and say “NO” to raising the cost of higher education. If attending a university will break your bank, the IRS has a solution: the agency offers a variety of excellent educational training and learning tools for small businesses for FREE……
 

Those of you who consider yourselves tax pros should check out
IRS Live. A real-time webinar, IRS Live is a panel discussion among IRS experts and industry professionals aimed at educating tax professionals on current and complex tax issues affecting them and their clients. You can actually earn Continuing Professional Education credits for participating in the webinar! IRS Live is broadcast bimonthly and the next program airs on Dec. 14.
 
For small business owners who are too busy to hit the books can boost their knowledge by visiting the
Small Business/Self-Employed Virtual Small Business Tax Workshop. The curriculum caters to new owners and features lessons about how to set up and run your business so paying taxes isn’t a hassle, what you need to know about Federal Taxes and your new business, and much more. The best part is that you can go to recess whenever you get tired of listening to the teacher talk about retirement plans and tax obligations.
 
While you’re on the computer, you should print the handy-dandy
2012 tax calendar for small businesses and the self-employed, or set it as your desktop wallpaper. It reminds you about everything from the exact days you should deposit your payroll tax, to what forms you need to file and when. Or, if you’re an avid reader and don’t want to get too lost in that novel, just order a tax information bookmark – or even 100 if you want one for every book! You can go shopping for other business products here, and remember, everything is always free from the IRS.
 
Brochures are nice, but could you spot a
tax scammer walking down the street? The IRS even provides tools to help identify, avoid, and report different types of scams. Still can’t get enough? Whether you’re a teacher looking to freshen up those old lesson plans or just somebody who wants to become more proficient in the business world, Understanding Taxes is a gold mine of educational resources. It provides detailed lesson plans, interactive activities, simulations, and answers for the hows and whys of taxes. The only thing the IRS doesn’t give you is an apple for the teacher.
 
On the Money,
Sufen Wang
Wang Solutions
 

Articles

Death and Taxes:

In Accounting & Finances,Business,Taxes on October 30, 2011 by Sufen Wang Tagged: , , , , , , ,

Think Taxes Will Be the Death of You?….  Well, Death Isn’t the End of Taxes…

Having trouble resting in peace? Do you feel that something is gravely wrong? Concerned about skeletons in your closet? You could be suffering from more than just Halloween fever – you might be haunted by the fact that you need to file that “LAST” tax return after your death!
 
Yes, you read that right: death does not excuse a final accounting with the IRS. Death and taxes may be equally inevitable, but
the taxman demands the last word, and the return is due by April 15 of the year following the taxpayer’s death. The estate tax return for a decedent who died after Dec. 16, 2010 is due nine months after the date of the decedent’s death.
 
However, if you died between Dec. 31, 2009 and Dec. 17, 2010, you’re in luck! The IRS decided to automatically grant filing extensions, as long as the executor timely files
Form 4768. That means no late filing and payment penalties on estates of decedents who submit Form 706 or 706-NA and pay the estate tax by March 19, 2012.
 
The IRS is offering another treat this Halloween season! The due date for
Basis Form 8939 – an information return used to report information about property acquired from a decedent and to allocate basis increase to certain property acquired from a decedent. – has been changed from Nov. 15, 2011 to Jan. 17, 2012. The IRS will not issue another extension and an executor may only file an amended Form 8939 by July 17, 2012 if the provisions of § 301.9100-2(b) are satisfied.

 The IRS has one more trick in its bag. Notice 2011-76 also provides penalty relief for certain beneficiaries of estates on their 2010 federal income tax returns. Usually the property recipient will be penalized if they don’t pay taxes on what they received – unless their neglect is due to a reasonable cause. Now, the IRS will presume that the recipient’s failure to pay was due to a reasonable cause; the recipient just needs to write “IRS Notice 2011-76” across the top of their amended return.
 

By the way, one last word, you really should “supervise” your executor to ensure that he/she files the extension on time and avoids any penalties. Not that it matters, since you personally do not have to worry about paying the extra dough! 

 
 
On the Money,
Sufen Wang
Wang Solutions